Ammonia and methanol are being positioned as potential low-carbon fuels and hydrogen carriers in the global energy transition. Traditionally used as industrial feedstocks, these chemicals are now under consideration for applications in clean power generation, shipping and long-distance hydrogen transport.
GlobalData’s analysis shows that while they could support decarbonisation in hard-to-abate sectors, their adoption depends heavily on the development of clean hydrogen supply chains. Countries including Japan, South Korea and members of the European Union have outlined strategies to incorporate low-carbon ammonia and methanol into their energy mix. In line with these strategies, companies such as Yara, Maersk and CF have announced large-scale projects to boost their production. There is also strong interest in these commodities from the shipping industry, where methanol and ammonia are viewed as scaleable alternatives to heavy fuel oil.
Low-carbon ammonia capacity is forecast to reach close to 250 million tonnes per annum by 2030, supported by more than 460 upcoming plants worldwide. Low-carbon methanol is also set for expansion, with the number of plants projected to approach 150 by 2030. Yet many of these projects remain in early planning stages. An increasing number of hydrogen-linked initiatives have recently been delayed or cancelled, underscoring the uncertainty of their implementation.
High production costs, technical challenges around storage and handling, and the need to develop specialised bunkering and transportation infrastructure are hindering the market growth for now. Some governments are providing funding and regulatory guidance, but industry adoption timelines remain unclear and depend on the successful scaling of pilot programmes into commercial operations.
GlobalData concludes that low-carbon ammonia and methanol could play a role in selected regions and sectors if project execution, cost reduction and regulatory support materialise at scale. Further analysis of low-carbon ammonia and methanol projects, competitive analysis can be found in GlobalData’s new theme report, Ammonia and Methanol in Energy Transition.
